FVCBankcorp, Inc. reports record first quarter earnings

For Immediate Release —April 18, 2017

Fairfax, VA – FVCBankcorp, Inc. (OTCQX:FVCB) (the “Company”) reported unaudited consolidated earnings of $2.3 million for the first quarter of 2017, or $0.27 diluted earnings per share, an increase of $564 thousand, or 32.0% compared with the 2016 first quarter net income of $1.8 million, or $0.21 diluted earnings per share. Return on average assets improved to 1.03% for the quarter, while return on average equity increased to 11.42%.

“2017 marks a significant milestone in the Company’s existence, as the Bank will celebrate its 10th anniversary in November,” stated David W. Pijor, chairman, president and CEO. “We are optimistic about our loan growth projections as evidenced by a robust loan pipeline and our talented lending team. Our expanding branch network and business development efforts provide relationship-driven opportunities to fund our anticipated growth.”

Balance Sheet

Total assets increased to $922.3 million compared with $740.8 million as of March 31, 2017, and 2016, respectively, an increase of 24.5%. Loans receivable totaled $770.8 million as of March 31, 2017, compared with $639.6 million as of March 31, 2016, an increase of $131.1 million, or 20.5%. For the first quarter of 2017, new loans closed totaled approximately $54 million, although loans receivable increased only $2.7 million due to historically high repayments, including commercial line of credit and construction loan activity, and the repayment of a $6.9 million troubled debt restructuring during the first quarter. We anticipate stronger growth for the remainder of the year as payoffs normalize and loans in the pipeline close.

Total deposits increased to $813.5 million as of March 31, 2017, compared with $660.7 million as of March 31, 2016, an increase of $152.8 million, or 23.1%. Deposits increased $37.5 million compared with the prior quarter ended December 31, 2016, an annualized growth rate of 19.3%. Noninterest bearing deposits totaled $172.5 million at March 31, 2017, comprising 21.2% of total deposits and increased $6.8 million, or 16.5% on an annualized basis compared with the prior quarter. Wholesale deposits totaled $76.2 million, or 9.4% of total deposits at March 31, 2017, and represent a short-term funding source to support the balance sheet growth.

Income Statement

Net interest income totaled $7.6 million, an increase of $969 thousand, or 14.6% for the quarter ended March 31, 2017, compared with the quarter ended March 31, 2016. The Company’s net interest margin was 3.42% and 3.73% for the quarters ended March 31, 2017, and 2016, respectively, the decline primarily attributable to the subordinated debt issued in June 2016. On a linked quarter basis, the margin increased to 3.42% from 3.38%.

Net income includes proceeds totaling $443 thousand from a claim on the bank owned life insurance (BOLI) policies. Noninterest income excluding the BOLI proceeds and gain on sale of securities, totaled $253 thousand and $261 thousand for the quarters ended March 31, 2017, and 2016, respectively. While the Company maintains its commitment to be a low fee bank for its customers, it has introduced new initiatives that are expected to enhance fee income in 2017 and future years.

Noninterest expenses increased $748 thousand, or 18.9%, for the 2017 first quarter compared with the 2016 first quarter. The increase is partially attributable to the new branch in Ashburn, which opened in October 2016. Salary and compensation related expenses increased $368 thousand, or 14.9% due to new hires, including branch personnel, annual compensation-related increases and associated taxes for 2017. Other operating expenses increased $381 thousand, or 25.5%, for the same period and is due to enhancements in BSA staffing and monitoring, increased franchise taxes and other operating expenses due to growth, including the Ashburn branch. The efficiency ratio was 60.1% and 57.6%, for the quarters ended March 31, 2017, and 2016, respectively.

Asset Quality

Asset quality remains strong as nonperforming loans and loans 90 days or more past due totaled only $1.1 million, or 0.11% of total assets. Troubled debt restructurings totaled $5.0 million and are performing as agreed with no impairments. The Company charged-off a fully-reserved loan totaling $26 thousand during the quarter, while the allowance for loan losses increased to 0.88% of the total loans reflecting refinements to the loan loss allocation as the loan portfolio grows.

Tangible book value per share was $10.10 and $9.28 as of March 31, 2017 and 2016, respectively. The Company maintains all regulatory capital ratios in excess of “well-capitalized” under the Basel III guidelines.

About FVCBankcorp, Inc.

Celebrating 10 years of sound financial performance and continued growth, FVCbank commenced operations in November 2007 and is the wholly-owned subsidiary of FVCBankcorp, Inc. FVCbank is a $921.1 million Virginia-chartered community bank serving the banking needs of commercial businesses, nonprofit organizations, professional service entities, their owners and employees located in the greater Washington D.C. metropolitan and Northern Virginia area. Locally owned and managed, it is based in Fairfax, Virginia and has six full-service offices in Arlington, Ashburn, Fairfax, Manassas, Reston and Springfield, Virginia. Visit www.fvcbank.com for more information.

For more information on the Company’s 2017 first quarter selected financial information, please visit the Investor Relations page of FVCBankcorp, Inc.’s website, www.fvcbank.com.

Caution about Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited, to statements about the Company’s plans, objectives, estimates, intentions and expectations as to future trends, plans, events or results of the Company’s operations and policies and regarding general economic conditions. These forward-looking statements are based on current beliefs that involve significant risks, uncertainties, and assumptions. Because of these uncertainties and the assumptions on which the forward-looking statements are based, actual operations and results in the future may differ materially from those indicated herein. Readers are cautioned against placing undue reliance on any such forward-looking statements.